Spotlight

Indian equity markets are likely to face a volatile session, with the possibility of consolidation and profit-booking following the benchmark indices’ six-session winning streak. While a sustained improvement in foreign institutional investor (FII) flows offers some support, deteriorating global market cues could weigh on domestic investor sentiment and limit further upside in the near term.

Global markets have come under significant selling pressure following a sharp overnight sell-off on Wall Street, triggered by a broad-based unwinding of AI-related trades and heavy losses in semiconductor stocks. The Dow Jones Industrial Average fell 3.45%, while the S&P 500 and Nasdaq Composite declined 4.36% and 5.52%, respectively, pushing the latter two benchmarks into correction territory. The weakness extended across Asian markets, with Japan’s Nikkei 225 falling more than 5% and South Korea’s KOSPI losing over 6%, underscoring the extent of the risk-off sentiment across global equities.

The sharp correction in US technology stocks and the subsequent weakness across Asian markets could spill over into domestic equities, despite improving foreign fund flows and relatively moderate crude oil prices. Investors are likely to remain cautious, with global technology valuations, the sustainability of FII buying and movements in crude oil prices emerging as key determinants of near-term market direction.

On the domestic institutional front, FIIs have remained net buyers for five consecutive sessions, with buying momentum gathering considerable pace. The ?14,975 crore net inflow recorded on November 5 was the largest single-day investment during this period, marking a notable reversal from the sustained selling pressure witnessed throughout October. The continuation of these inflows could provide an important cushion against external volatility, although their sustainability remains crucial.

Meanwhile, WTI crude oil has staged a technical rebound, with prices moving towards the $91-per-barrel mark. The rebound in crude oil prices towards the $91-per-barrel mark, following a brief one-day pullback, keeps concerns over India's energy import bill, inflationary pressures and external balances firmly in focus.  

Technical View

Nifty 50

Nifty 50 has moved decisively above its 20-day, 50-day, 100-day and 200-day EMAs, indicating a significant improvement in its overall technical structure and strengthening bullish momentum. The immediate resistance is placed around 24,600. A sustained breakout above this level could extend the upward momentum towards 24,800–25,000.
 
On the downside, 24,400–24,300 forms the immediate support zone, followed by the crucial psychological support at 24,000. Holding above these levels will be important to sustain the prevailing positive momentum. 

Bank Nifty

Bank Nifty continues to indicate a substantial improvement in its technical structure, supported by strengthening bullish momentum. On the upside, 58,000–58,200 remains the immediate resistance zone. A sustained breakout above this range could extend the rally towards the next hurdle at 58,600–58,800.
 
On the downside, 57,500–57,300 forms the immediate support zone, followed by the next support range at 56,800–56,600. Holding above these levels will be important to sustain the ongoing recovery, while a decisive break below the immediate support zone could trigger renewed selling pressure and profit-booking.